Chapter V: Part 5

[22] It was observed by some, as appears from the speech of Agelaus of Naupactum, in the general congress of Greece. See Polyb., lib. 5, cap. 104.

[23] Those concluded by the Peace of the Pyrenees, Nimeguen, Ryswick, and Aix-la-Chapelle.

[24] That concluded by the Peace of Utrecht.

[25] If the Roman Empire was of advantage, it could only proceed from this, that mankind were generally in a very disorderly, uncivilized condition before its establishment.

OF TAXES.

There is a maxim that prevails among those whom in this country we call “ways and means” men, and who are denominated financiers and maltotiers in France, that every new tax creates a new ability in the subject to bear it, and that each increase of public burdens increases proportionably the industry of the people. This maxim is of such a nature as is most likely to be extremely abused, and is so much the more dangerous, as its truth cannot be altogether denied; but it must be owned, when kept within certain bounds, to have some foundation in reason and experience.

When a tax is laid upon commodities which are consumed by the common people, the necessary consequence may seem to be that either the poor must retrench something from their way of living, or raise their wages so as to make the burden of the tax fall entirely upon the rich. But there is a third consequence which very often follows upon taxes—viz., that the poor increase their industry, perform more work, and live as well as before without demanding more for their labour. Where taxes are moderate, are laid on gradually, and affect not the necessaries of life, this consequence naturally follows; and it is certain that such difficulties often serve to excite the industry of a people, and render them more opulent and laborious than others who enjoy the greatest advantages. For we may observe, as a parallel instance, that the most commercial nations have not always possessed the greatest extent of fertile land; but, on the contrary, that they have laboured under many natural disadvantages. Tyre, Athens, Carthage, Rhodes, Genoa, Venice, Holland are strong examples to this purpose; and in all history we find only three instances of large and fertile countries which have possessed much trade—the Netherlands, England, and France. The two former seem to have been allured by the advantages of their maritime situation, and the necessity they lay under of frequenting foreign ports in order to procure what their own climate refused them; and as to France, trade has come very late into the kingdom, and seems to have been the effect of reflection and observation in an ingenious and enterprising people, who remarked the immense riches acquired by such of the neighbouring nations as cultivated navigation and commerce.

The places mentioned by Cicero as possessed of the greatest commerce of his time are Alexandria, Colchos, Tyre, Sidon, Andros, Cyprus, Pamphylia, Lycia, Rhodes, Chios, Byzantium, Lesbos, Smyrna, Miletum, Coos. All these, except Alexandria, were either small islands or narrow territories; and that city owed its trade entirely to the happiness of its situation.

Since, therefore, some natural necessities or disadvantages may be thought favourable to industries, why may not artificial burdens have the same effect? Sir William Temple,[26] we may observe, ascribes the industry of the Dutch entirely to necessity, proceeding from their natural disadvantages; and illustrates his doctrine by a very striking comparison with Ireland, “where,” says he, “by the largeness and plenty of the soil, and scarcity of people, all things necessary to life are so cheap that an industrious man by two days’ labour may gain enough to feed him the rest of the week. Which I take to be a very plain ground of the laziness attributed to the people. For men naturally prefer ease before labour, and will not take pains if they can live idle; though when, by necessity, they have been inured to it, they cannot leave it, being grown a custom necessary to their health, and to their very entertainment. Nor perhaps is the change harder from constant ease to labour than from constant labour to ease.” After which the author proceeds to confirm his doctrine by enumerating as above the places where trade has most flourished in ancient and modern times, and which are commonly observed by such narrow, confined territories as beget a necessity for industry.

It is always observed in years of scarcity, if it be not extreme, that the poor labour more and really live better than in years of great plenty, when they indulge themselves in idleness and riot. I have been told by a considerable manufacturer that in the year 1740, when bread and provisions of all kinds were very dear, his workmen not only made a shift to live, but paid debts which they had contracted in former years that were much more favourable and abundant.

This doctrine, therefore, with regard to taxes may be admitted to some degree, but beware of the abuse. Exorbitant taxes, like extreme necessity, destroy industry by producing despair; and even before they reach this pitch they raise the wages of the labourer and manufacturer, and heighten the price of all commodities. An attentive, disinterested legislature will observe the point when the emolument ceases and the prejudice begins; but as the contrary character is much more common, it is to be feared that taxes all over Europe are multiplying to such a degree as will entirely crush all art and industry; though perhaps their first increase, together with circumstances, might have contributed to the growth of these advantages.

The best taxes are such as are levied upon consumptions, especially those of luxury, because such taxes are less felt by the people. They seem, in some measure, voluntary, since a man may choose how far he will use the commodity which is taxed: they are paid gradually and insensibly, and being confounded with the natural price of the commodity, they are scarcely perceived by the consumers. Their only disadvantage is that they are expensive in the levying.

Taxes upon possessions are levied without expense, but have every other disadvantage. Most states, however, are obliged to have recourse to them, in order to supply the deficiencies of the other.

But the most pernicious of all taxes are those which are arbitrary. They are commonly converted by their management into punishments on industry; and also by their unavoidable inequality are more grievous than by the real burden which they impose. It is surprising, therefore, to see them have place among any civilized people.

In general, all poll-taxes, even when not arbitrary—which they commonly are—may be esteemed dangerous; because it is so easy for the sovereign to add a little more and a little more to the sum demanded, that these taxes are apt to become altogether oppressive and intolerable. On the other hand, a duty upon commodities checks itself, and a prince will soon find that an increase of the impost is no increase of his revenue. It is not easy, therefore, for a people to be altogether ruined by such taxes.

Historians inform us that one of the chief causes of the destruction of the Roman state was the alteration which Constantine introduced into the finances, by substituting a universal poll-tax in lieu of almost all the tithes, customs, and excises which formerly composed the revenue of the empire. The people in all the provinces were so grinded and oppressed by the publicans that they were glad to take refuge under the conquering arms of the barbarians, whose dominion, as they had fewer necessities and less art, was found preferable to the refined tyranny of the Romans.

There is a prevailing opinion that all taxes, however levied, fall upon the land at last. Such an opinion may be useful in Britain, by checking the landed gentlemen, in whose hands our legislature is chiefly lodged, and making them preserve great regard for trade and industry; but I must confess that this principle, though first advanced by a celebrated writer, has so little appearance of reason that were it not for his authority it had never been received by anybody. Every man, to be sure, is desirous of pushing off from himself the burden of any tax which is imposed, and laying it upon others; but as every man has the same inclination, and is upon the defensive, no set of men can be supposed to prevail altogether in this contest. And why the landed gentleman should be the victim of the whole, and should not be able to defend himself as well as others are, I cannot readily imagine. All tradesmen, indeed, would willingly prey upon him and divide him among them if they could; but this inclination they always have, though no taxes were levied; and the same methods by which he guards against the imposition of tradesmen before taxes will serve him afterwards, and make them share the burden with him. No labour in any commodities that are exported can be very considerably raised in the price without losing the foreign market; and as some part of almost every manufactory is exported, this circumstance keeps the price of most species of labour nearly the same after the imposition of taxes. I may add that it has this effect upon the whole, for were any kind of labour paid beyond its proportion all hands would flock to it, and would soon sink it to a level with the rest.

I shall conclude this subject with observing that we have with regard to taxes an instance of what frequently happens in political institutions, that the consequence of things are diametrically opposite to what we should expect on the first appearance. It is regarded as a fundamental maxim of the Turkish Government that the Grand Seignior, though absolute master of the lives and fortunes of each individual, has no authority to impose a new tax; and every Ottoman prince who has made such an attempt either has been obliged to retract, or has found the fatal effects of his perseverance. One would imagine that this prejudice or established opinion were the firmest barrier in the world against oppression, yet it is certain that its effect is quite contrary. The emperor, having no regular method of increasing his revenue, must allow all the pashas and governors to oppress and abuse the subjects, and these he squeezes after their return from their government; whereas, if he could impose a new tax, like our European princes, his interest would so far be united with that of his people that he would immediately feel the bad effects of these disorderly levies of money, and would find that a pound raised by general imposition would have less pernicious effects than a shilling taken in so unequal and arbitrary a manner.

NOTE, OF TAXES.

[26] _Account of the Netherlands_, chap. vi.

OF PUBLIC CREDIT.

It appears to have been the common practice of antiquity to make provision in times of peace for the necessities of war, and to hoard up treasures beforehand as the instruments either of conquest or defence, without trusting to extraordinary imposts, much less to borrowing, in times of disorder and confusion. Besides the immense sums above mentioned[27] which were amassed by Athens, and by the Ptolemies and other successors of Alexander, we learn from Plato that the frugal Lacedemonians had also collected a great treasure; and Arrian and Plutarch[28] specify the riches which Alexander got possession of on the conquest of Susa and Ecbatana, and which were reserved, some of them, from the time of Cyrus. If I remember right, the Scripture also mentions the treasure of Hezekiah and the Jewish princes, as profane history does that of Philip and Perseus, kings of Macedon. The ancient republics of Gaul had commonly large sums in reserve. Every one knows the treasure seized in Rome by Julius Cæsar during the civil wars, and we find afterwards that the wiser emperors, Augustus, Tiberius, Vespasian, Severus, etc., always discovered the prudent foresight of saving great sums against any public exigency.

On the contrary, our modern expedient, which has become very general, is to mortgage the public revenues, and to trust that posterity during peace will pay off the encumbrances contracted during the preceding war; and they, having before their eyes so good an example of their wise fathers, have the same prudent reliance on their posterity, who at last, from necessity more than choice, are obliged to place the same confidence in a new posterity. But not to waste time in declaiming against a practice which appears ruinous beyond the evidence of a hundred demonstrations, it seems pretty apparent that the ancient maxims are in this respect much more prudent than the modern; even though the latter had been confined within some reasonable bounds, and had ever, in any one instance, been attended with such frugality in time of peace as to discharge the debts incurred by an expensive war. For why should the case be so very different between the public and an individual as to make us establish such different maxims of conduct for each? If the funds of the former be greater, its necessary expenses are proportionably larger; if its resources be more numerous, they are not infinite; and as its frame should be calculated for a much longer duration than the date of a single life, or even of a family, it should embrace maxims, large, durable, and generous, agreeable to the supposed extent of its existence. To trust to chances and temporary expedients is indeed what the necessity of human affairs frequently reduces it to, but whoever voluntarily depend on such resources have not necessity but their own folly to accuse for their misfortunes when any such befall them.

If the abuses of treasures be dangerous, either by engaging the state in rash enterprises or making it neglect military discipline in confidence of its riches, the abuses of mortgaging are more certain and inevitable—poverty, impotence, and subjection to foreign powers.

According to modern policy, war is attended with every destructive circumstance: loss of men, increase of taxes, decay of commerce, dissipation of money, devastation by sea and land. According to ancient maxims, the opening of the public treasure, as it produced an uncommon affluence of gold and silver, served as a temporary encouragement to industry, and atoned in some degree for the inevitable calamities of war.

What then shall we say to the new paradox, that public encumbrances are, of themselves, advantageous, independent of the necessity of contracting them; and that any state, even though it were not pressed by a foreign enemy, could not possibly have embraced a wiser expedient for promoting commerce and riches than to create funds, and debts, and taxes without limitation? Discourses such as these might naturally have passed for trials of wit among rhetoricians, like the panegyrics on folly and a fever, on Busiris and Nero, had we not seen such absurd maxims patronized by great ministers and by a whole party among us; and these puzzling arguments (for they deserve not the name of specious), though they could not be the foundation of Lord Orford’s conduct, for he had more sense, served at least to keep his partisans in countenance and perplex the understanding of the nation.

Let us examine the consequences of public debts, both in our domestic management by their influence on commerce and industry, and in our foreign transactions by their effect on wars and negotiations.

There is a word which is here in the mouth of everybody, and which I find has also got abroad and is much employed by foreign writers[29] in imitation of the English—and this is “circulation.” This word serves as an account of everything, and though I confess that I have sought for its meaning in the present subject ever since I was a schoolboy, I have never yet been able to discover it. What possible advantage is there which the nation can reap by the easy transference of stock from hand to hand? Or is there any parallel to be drawn from the circulation of other commodities to that of chequer notes and India bonds? Where a manufacturer has a quick sale of his goods to the merchant, the merchant to the shopkeeper, the shopkeeper to his customers, this enlivens industry and gives new encouragement to the first dealer or the manufacturer and all his tradesmen, and makes them produce more and better commodities of the same species. A stagnation is here pernicious, wherever it happens, because it operates backwards, and stops or benumbs the industrious hand in its production of what is useful to human life. But what production we owe to Change-alley, or even what consumption, except that of coffee, and pen, ink, and paper, I have not yet learned; nor can one foresee the loss or decay of any one beneficial commerce or commodity, though that place and all its inhabitants were for ever buried in the ocean.

But though this term has never been explained by those who insist so much on the advantages that result from a circulation, there seems, however, to be some benefit of a similar kind arising from our encumbrances—as, indeed, what human evil is there which is not attended with some advantage? This we shall endeavour to explain, that we may estimate the weight which we ought to allow it.

Public securities are with us become a kind of money, and pass as readily at the current price as gold or silver. Wherever any profitable undertaking offers itself, however expensive, there are never wanting hands enough to embrace it; nor need a trader who has sums in the public stocks fear to launch out into the most extensive trade, since he is possessed of funds which will answer the most sudden demand that can be made upon him. No merchant thinks it necessary to keep by him any considerable cash. Bank-notes or India bonds, especially the latter, serve all the same purposes; because he can dispose of them or pledge them to a banker in a quarter of an hour; and at the same time they are not idle, even when in his escritoire, but bring him in a constant revenue. In short, our national debts furnish merchants with a species of money that is continually multiplying in their hands, and produces sure gain besides the profits of their commerce. This must enable them to trade upon less profit. The small profit of the merchant renders the commodity cheaper, causes a greater consumption, quickens the labour of the common people, and helps to spread arts and industry through the whole society.

There are also, we may observe, in England and in all states which have both commerce and public debts, a set of men who are half merchants, half stock-holders, and may be supposed willing to trade for small profits; because commerce is not their principal or sole support, and their revenues in the funds are a sure resource for themselves and their families. Were there no funds great merchants would have no expedient for realizing or securing any part of their profit but by making purchases of land, and land has many disadvantages in comparison of funds. Requiring more care and inspection, it divides the time and attention of the merchant; upon any tempting offer or extraordinary accident in trade, it is not so easily converted into money; and as it attracts too much, both by the many natural pleasures it affords and the authority it gives, it soon converts the citizen into the country gentleman. More men, therefore, with large stocks and incomes, may naturally be supposed to continue in trade where there are public debts; and this, it must be owned, is of some advantage to commerce by diminishing its profits, promoting circulation, and encouraging industry.

But, in opposition to these two favourable circumstances, perhaps of no very great importance, weigh the many disadvantages which attend our public debts in the whole interior economy of the state; you will find no comparison between the ill and the good which result from them.

First, it is certain that national debts cause a mighty confluence of people and riches to the capital, by the great sums which are levied in the provinces to pay the interest of those debts; and perhaps, too, by the advantages in trade above mentioned, which they give the merchants in the capital above the rest of the kingdom. The question is, whether, in our case, it be for the public interest that so many privileges should be conferred on London, which has already arrived at such an enormous size and seems still increasing? Some men are apprehensive of the consequences. For my part, I cannot forbear thinking that though the head is undoubtedly too big for the body, yet that great city is so happily situated that its excessive bulk causes less inconvenience than even a smaller capital to a greater kingdom. There is more difference between the prices of all provisions in Paris and Languedoc than between those in London and Yorkshire.

Secondly, public stocks, being a kind of paper-credit, have all the disadvantages attending that species of money. They banish gold and silver from the most considerable commerce of the state, reduce them to common circulation, and by that means render all provisions and labour dearer than otherwise they would be.

Thirdly, the taxes which are levied to pay the interests of these debts are apt to be a check upon industry, to heighten the price of labour, and to be an oppression on the poorer sort.

Fourthly, as foreigners possess a share of our national funds, they render the public in a manner tributary to them, and may in time occasion the transport of our people and our industry.

Fifthly, the greatest part of public stock being always in the hands of idle people, who live on their revenue, our funds give great encouragement to a useless and inactive life.

But though the injury which arises to commerce and industry from our public funds will appear, upon balancing the whole, very considerable, it is trivial in comparison of the prejudice which results to the state considered as a body politic, which must support itself in the society of nations, and have various transactions with other states, in wars and negotiations. The ill there is pure and unmixed, without any favourable circumstance to atone for it, and it is an ill too of a nature the highest and most important.

We have, indeed, been told that the public is no weaker upon account of its debts, since they are mostly due among ourselves, and bring as much property to one as they take from another. It is like transferring money from the right hand to the left, which leaves the person neither richer nor poorer than before. Such loose reasonings and specious comparisons will always pass where we judge not upon principles. I ask, is it possible, in the nature of things, to overburden a nation with taxes, even where the sovereign resides among them? The very doubt seems extravagant, since it is requisite in every commonwealth that there be a certain proportion observed between the laborious and the idle part of it. But if all our present taxes be mortgaged, must we not invent new ones? and may not this matter be carried to a length that is ruinous and destructive?

In every nation there are always some methods of levying money more easy than others, agreeable to the way of living of the people and the commodities they make use of. In Britain the excises upon malt and beer afford a very large revenue, because the operations of malting and brewing are very tedious, and are impossible to be concealed; and at the same time, these commodities are not so absolutely necessary to life as that the raising their price would very much affect the poorer sort. These taxes being all mortgaged, what difficulty to find new ones! what vexation and ruin of the poor!

Duties upon consumptions are more equal and easy than those upon possessions. What a loss to the public that the former are all exhausted, and that we must have recourse to the more grievous method of levying taxes!

Were all the proprietors of land only stewards to the public, must not necessity force them to practise all the arts of oppression used by stewards, where the absence or negligence of the proprietor render them secure against inquiry?

It will scarce be asserted that no bounds ought ever to be set to national debts, and that the public would be no weaker were twelve or fifteen shillings in the pound land-tax mortgaged, with the present customs and excises. There is something therefore in the case beside the mere transferring of property from one hand to another. In 500 years the posterity of those now in the coaches and of those upon the boxes will probably have changed places, without affecting the public by these revolutions.

Suppose the public once fairly brought to that condition to which it is hastening with such amazing rapidity; suppose the land to be taxed eighteen or nineteen shillings in the pound (for it can never bear the whole twenty); suppose all the excises and customs to be screwed up to the outmost which the nation can bear, without entirely losing its commerce and industry; and suppose that all those funds are mortgaged to perpetuity, and that the invention and wit of all our projectors can find no new imposition which may serve as the foundation of a new loan; and let us consider the necessary consequences of this situation. Though the imperfect state of our political knowledge and the narrow capacities of men make it difficult to foretell the effects which will result from any untried measure, the seeds of ruin are here scattered with such profusion as not to escape the eye of the most careless observer.

In this unnatural state of society, the only persons who possess any revenue beyond the immediate effects of their industry are the stockholders, who draw almost all the rent of the land and houses, besides the produce of all the customs and excises. These are men who have no connections in the state, who can enjoy their revenue in any part of the world in which they choose to reside, who will naturally bury themselves in the capital, or in great cities, and who will sink into the lethargy of a stupid and pampered luxury, without spirit, ambition, or enjoyment. Adieu to all ideas of nobility, gentry, and family. The stocks can be transferred in an instant, and being in such a fluctuating state, will seldom be transmitted during three generations from father to son. Or were they to remain ever so long in one family, they convey no hereditary authority or credit to the possessors; and by this means, the several ranks of men, which form a kind of independent magistracy in a state, instituted by the hand of nature, are entirely lost, and every man in authority derives his influence from the commission alone of the sovereign. No expedient remains for preventing or suppressing insurrections but mercenary armies; no expedient at all remains for resisting tyranny; elections are swayed by bribery and corruption alone; and the middle power between king and people being totally removed, a horrible despotism must infallibly prevail. The landholders, despised for their poverty and hated for their oppressions, will be utterly unable to make any opposition to it.

Though a resolution should be formed by the legislature never to impose any tax which hurts commerce and discourages industry, it will be impossible for men, in subjects of such extreme delicacy, to reason so justly as never to be mistaken, or amidst difficulties so urgent, never to be seduced from their resolution. The continual fluctuations in commerce require continual alterations in the nature of the taxes, which exposes the legislature every moment to the danger both of wilful and involuntary error; and any great blow given to trade, whether by injudicious taxes or by other accidents, throws the whole system of the government into confusion.

But what expedient is the public now to fall upon, even supposing trade to continue in the most flourishing condition, to support its foreign wars and enterprises, and to defend its own honour and interests or those of its allies? I do not ask how the public is to exert such a prodigious power as it has maintained during our late wars, where we have so much exceeded, not only our own natural strength, but even that of the greatest empires. This extravagance is the abuse complained of, as the source of all the dangers to which we are at present exposed. But since we must still suppose great commerce and opulence to remain even after every fund is mortgaged, those riches must be defended by proportionable power, and whence is the public to derive the revenue which supports it? It must plainly be from a continual taxation of the annuitants, or, which is the same thing, from mortgaging anew on every exigency a certain part of their annuity, and thus making them contribute to their own defence and to that of the nation; but the difficulties attending this system of policy will easily appear, whether we suppose the king to have become absolute master or to be still controlled by national councils, in which the annuitants themselves must necessarily bear the principal sway.

If the prince has become absolute, as may naturally be expected from this situation of affairs, it is so easy for him to increase his exactions upon the annuitants, which amount only to the retaining money in his own hands, that this species of property will soon lose all its credit, and the whole income of every individual in the state must lie entirely at the mercy of the sovereign—a degree of despotism which no oriental monarchy has ever yet attained. If, on the contrary, the consent of the annuitants be requisite for every taxation, they will never be persuaded to contribute sufficiently even to the support of government, as the diminution of their revenue must in that case be very sensible, would not be disguised under the appearance of a branch of excise or customs, and would not be shared by any other order of the state, who are already supposed to be taxed to the utmost. There are instances in some republics of a hundredth penny, and sometimes of the fiftieth, being given to the support of the state; but this is always an extraordinary exertion of power, and can never become the foundation of a constant national defence. We have always found, where a government has mortgaged all its revenues, that it necessarily sinks into a state of languor, inactivity, and impotence.

Such are the inconveniences which may reasonably be foreseen of this situation to which Great Britain is visibly tending, not to mention the numberless inconveniences which cannot be foreseen, and which must result from so monstrous a situation as that of making the public the sole proprietor of land, besides investing it with every branch of customs and excise which the fertile imagination of ministers and projectors have been able to invent.

I must confess that there is a strange supineness, from long custom, crept into all ranks of men with regard to public debts, not unlike what divines so vehemently complain of with regard to their religious doctrines. We all own that the most sanguine imagination cannot hope either that this or any future ministry will be possessed of such rigid and steady frugality as to make any considerable progress in the payment of our debts, or that the situation of foreign affairs will, for any long time, allow them leisure and tranquillity for such an undertaking.[30] What then is to become of us? Were we ever so good Christians and ever so resigned to Providence, this, methinks, were a curious question, even considered as a speculative one, and what it might not be altogether impossible to form some conjectural solution of. The events here will depend little upon the contingencies of battles, negotiations, intrigues, and factions. There seems to be a natural progress of things which may guide our reasoning. As it would have required but a moderate share of prudence when we first began this practice of mortgaging to have foretold, from the nature of men and of ministers, that things would necessarily be carried to the length we see, so now that they have at last happily reached it, it may not be difficult to guess at the consequences. It must, indeed, be one of these two events—either the nation must destroy public credit, or public credit will destroy the nation. It is impossible they can both subsist after the manner they have been hitherto managed, in this as well as in some other nations.

There was indeed a scheme for the payment of our debts which was proposed by an excellent citizen, Mr. Hutchinson, above thirty years ago, and which was much approved of by some men of sense, but never was likely to take effect. He asserted that there was a fallacy in imagining that the public owed this debt, for that really every individual owed a proportional share of it, and paid, in his taxes, a proportional share of the interest, beside the expenses of levying these taxes. Had we not better, then, says he, make a proportional distribution of the debt among us, and each of us contribute a sum suitable to his property, and by that means discharge at once all our funds and public mortgages? He seems not to have considered that the laborious poor pay a considerable part of the taxes by their annual consumptions, though they could not advance at once a proportional part of the sum required; not to mention that property in money and stock in trade might easily be concealed or disguised, and that visible property in lands and houses would really at last answer for the whole—an inequality and oppression which never would be submitted to. But though this project is never likely to take place, it is not altogether improbable that when the nation become heartily sick of their debts, and are cruelly oppressed by them, some daring projector may arise with visionary schemes for their discharge. And as public credit will begin, by that time, to be a little frail, the least touch will destroy it, as happened in France; and in this manner it will die of the doctor.[31]

But it is more probable that the breach of national faith will be the necessary effect of wars, defeats, misfortunes, and public calamities, or even perhaps of victories and conquests. I must confess, when I see princes and states fighting and quarrelling, amidst their debts, funds, and public mortgages, it always brings to my mind a match of cudgel-playing fought in a china-shop. How can it be expected that sovereigns will spare a species of property which is pernicious to themselves and to the public, when they have so little compassion on lives and properties which are useful to both? Let the time come (and surely it will come) when the new funds created for the exigencies of the year are not subscribed to, and raise not the money projected. Suppose either that the cash of the nation is exhausted, or that our faith, which has hitherto been so ample, begins to fail us; suppose that in this distress the nation is threatened with an invasion; a rebellion is suspected or broken out at home; a squadron cannot be equipped for want of pay, victuals, or repairs; or even a foreign subsidy cannot be advanced—what must a prince or minister do in such an emergence? The right of self-preservation is unalienable in every individual, much more in every community; and the folly of our statesmen must then be greater than the folly of those who first contracted debt, or, what is more, than that of those who trusted, or continue to trust this security, if these statesmen have the means of safety in their hands and do not employ them. The funds, created and mortgaged, will by that time bring in a large yearly revenue, sufficient for the defence and security of the nation. Money is perhaps lying in the exchequer, ready for the discharge of the quarterly interest. Necessity calls, fear urges, reason exhorts, compassion alone exclaims; the money will immediately be seized for the current service—under the most solemn protestations, perhaps, of being immediately replaced. But no more is requisite; the whole fabric, already tottering, falls to the ground, and buries thousands in its ruins. And this, I think, may be called the natural death of public credit; for to this period it tends as naturally as an animal body to its dissolution and destruction.[32]

These two events supposed above are calamitous, but not the most calamitous. Thousands are hereby sacrificed to the safety of millions; but we are not without danger that the contrary event may take place, and that millions may be sacrificed for ever to the temporary safety of thousands.[33] Our popular government perhaps will render it difficult or dangerous for a minister to venture on so desperate an expedient as that of a voluntary bankruptcy; and though the House of Lords be altogether composed of the proprietors of lands, and the House of Commons chiefly, and consequently neither of them can be supposed to have great property in the funds, yet the connections of the members may be so great with the proprietors as to render them more tenacious of public faith than prudence, policy, or even justice, strictly speaking, requires. And perhaps, too, our foreign enemies, or rather enemy (for we have but one to dread) may be so politic as to discover that our safety lies in despair, and may not therefore show the danger open and barefaced till it be inevitable. The balance of power in Europe, our grandfathers, our fathers, and we, have all justly esteemed too unequal to be preserved without our attention and assistance. But our children, weary with the struggle, and fettered with encumbrances, may sit down secure and see their neighbours oppressed and conquered, till at last they themselves and their creditors lie both at the mercy of the conqueror. And this may properly enough be denominated the violent death of our public credit.

These seem to be the events which are not very remote, and which reason foresees as clearly almost as she can do anything that lies in the womb of time. And though the ancients maintained that, in order to reach the gift of prophecy, a certain divine fury or madness was requisite, one may safely affirm that, in order to deliver such prophecies as these, no more is necessary than merely to be in one’s senses, free from the influence of popular madness and delusion.

NOTES, OF PUBLIC CREDIT.

[27] Essay _Of the Balance of Trade_.

[28] Plut. in _Vita Alex_. He makes these treasures amount to 80,000 talents, or about 15 millions sterling. Quintus Curtius (lib. 5, cap. 2) says that Alexander found in Susa above 50,000 talents.

[29] Melon, Du Tot, Law, in the pamphlets published in France.

[30] In times of peace and security, when alone it is possible to pay debt, the moneyed interest are averse to receive partial payments, which they know not how to dispose of to advantage, and the landed interest are averse to continue the taxes requisite for that purpose. Why therefore should a minister persevere in a measure so disagreeable to all parties? For the sake, I suppose, of a posterity which he will never see, or of a few reasonable, reflecting people whose united interest perhaps will not be able to secure him the smallest borough in England. It is not likely we shall ever find any minister so bad a politician. With regard to these narrow, destructive maxims of politics all ministers are expert enough.

[31] Some neighbouring states practise an easy expedient, by which they lighten their public debts. The French have a custom (as the Romans formerly had) of augmenting their money, and this the nation has been so much familiarized to that it hurts not public credit, though it be really cutting off at once, by an edict, so much of their debts. The Dutch diminish the interest without the consent of their creditors; or, which is the same thing, they arbitrarily tax the funds as well as other property. Could we practise either of these methods, we need never be oppressed by the national debt; and it is not impossible but one of these, or some other method, may, at all adventures, be tried, on the augmentation of our encumbrances and difficulties. But people in this country are so good reasoners upon whatever regards their interest, that such a practice will deceive nobody, and public credit will probably tumble at once by so dangerous a trial.

[32] So great dupes are the generality of mankind, that notwithstanding such a violent shock to public credit as a voluntary bankruptcy in England would occasion, it would not probably be long ere credit would again revive in as flourishing a condition as before. The present King of France, during the late war, borrowed money at lower interest than ever his grandfather did, and as low as the British Parliament, comparing the natural rate of interest in both kingdoms. And though men are commonly more governed by what they have seen than by what they foresee, with whatever certainty, yet promises, protestations, fair appearances, with the allurements of present interest, have such powerful influence as few are able to resist. Mankind are, in all ages, caught by the same baits. The same tricks, played over and over again, still trepan them. The heights of popularity and patriotism are still the beaten road to power and tyranny; flattery to treachery; standing armies to arbitrary government; and the glory of God to the temporal interest of the clergy. The fear of an everlasting destruction of credit, allowing it to be an evil, is a needless bugbear. A prudent man, in reality, would rather lend to the public immediately after they had taken a sponge to their debts, than at present; as much as an opulent knave, even though one could not force him to pay, is a preferable debtor to an honest bankrupt; for the former, in order to carry on business, may find it his interest to discharge his debts, where they are not exorbitant. The latter has it not in his power. The reasoning of Tacitus (_Hist._ lib. 3), as it is eternally true, is very applicable to our present case: “Sed vulgus ad magnitudinem beneficiorum aderat: Stultissimus quisque pecuniis mercabatur: Apud sapientes cassa habebantur, quæ neque dari neque accipi, salva republica, poterant.” The public is a debtor, whom no man can oblige to pay. The only check which the creditors have on it is the interest of preserving credit; an interest which may easily be overbalanced by a very great debt, and by a difficult and extraordinary emergence, even supposing that credit irrecoverable. Not to mention that a present necessity often forces states into measures which are, strictly speaking, against their interest.

[33] I have heard it has been computed that all the creditors of the public, natives and foreigners, amount only to 17,000. These make a figure at present on their income; but in case of a public bankruptcy would in an instant become the lowest, as well as the most wretched of the people. The dignity and authority of the landed gentry and nobility is much better rooted, and would render the contention very unequal, if ever we come to that extremity. One would incline to assign to this event a very near period, such as half a century, had not our fathers’ prophecies of this kind been already found fallacious by the duration of our public credit so much beyond all reasonable expectation. When the astrologers in France were every year foretelling the death of Henry IV., “These fellows,” says he, “must be right at last.” We shall therefore be more cautious than to assign any precise date, and shall content ourselves with pointing out the event in general.

OF SOME REMARKABLE CUSTOMS.

I shall observe three remarkable customs in three celebrated governments, and shall conclude from the whole that all general maxims in politics ought to be established with great reserve, and that irregular and extraordinary appearances are frequently discovered in the moral as well as in the physical world. The former perhaps can we better account for after they happen, from springs and principles of which every one has within himself, or from obvious observation, the strongest assurance and conviction; but it is often fully as impossible for human prudence beforehand to foresee and foretell them.

I. One would think it essential to every supreme council or assembly which debates, that entire liberty of speech should be granted to every member, and that all motions or reasonings should be received which can any way tend to illustrate the point under deliberation. One would conclude, with still greater assurance, that after a motion was made, which was voted and approved by that assembly in which the legislative power is lodged, the member who made the motion must for ever be exempted from further trial or inquiry. But no political maxim can at first sight appear more undisputable than that he must at least be secured from all inferior jurisdiction, and that nothing less than the same supreme legislative assembly, in their subsequent meetings, could render him accountable for those motions and harangues which they had before approved of. But these axioms, however irrefragable they may appear, have all failed in the Athenian government, from causes, and principles too, which appear almost inevitable.

By the γραφη παρανομων, or “indictment of illegality” (though it has not been remarked by antiquaries or commentators), any man was tried and punished by any common court of judicature for any law which had passed upon his motion in the assembly of the people, if that law appeared to the court unjust or prejudicial to the public. Thus Demosthenes, finding that ship-money was levied irregularly, and that the poor bore the same burden as the rich in equipping the galleys, corrected this inequality by a very useful law, which proportioned the expense to the revenue and income of each individual. He moved for this law in the assembly, he proved its advantages,[34] he convinced the people, the only legislature in Athens, the law passed and was carried into execution; and yet he was tried in a criminal court for that law upon the complaint of the rich, who resented the alteration he had introduced into the finances. He was indeed acquitted upon proving anew the usefulness of his law.

Ctesiphon moved in the assembly of the people that particular honours should be conferred on Demosthenes, as on a citizen affectionate and useful to the commonwealth. The people, convinced of this truth, voted those honours; yet was Ctesiphon tried by the γραφη παρανομων. It was asserted, among other topics, that Demosthenes was not a good citizen, nor affectionate to the commonwealth, and the orator was called upon to defend his friend, and consequently himself, which he executed by that sublime piece of eloquence that has ever since been the admiration of mankind.

After the battle of Chæronea a law was passed, upon the motion of Hyperides, giving liberty to slaves and enrolling them in the troops.[35] On account of this law the orator was afterwards tried by the indictment above mentioned, and defended himself, among other topics, by that stroke celebrated by Plutarch and Longinus. “It was not I,” said he, “that moved for this law: it was the necessities of war; it was the battle of Chæronea.” The orations of Demosthenes abound with many instances of trials of this nature, and prove clearly that nothing was more commonly practised.

The Athenian Democracy was such a tumultuary government as we can scarce form a notion of in the present age of the world. The whole collective body of the people voted in every law without any limitation of property, without any distinction of rank, without control of any magistracy or senate;[36] and consequently without regard to order, justice, or prudence. The Athenians soon became sensible of the mischiefs attending this constitution, but being averse to the checking themselves by any rule or restriction, they resolved at least to check their demagogues or counsellors by the fear of future punishment and inquiry. They accordingly instituted this remarkable law, a law esteemed so essential to their government that Æschines insists on it as a known truth, that were it abolished or neglected it were impossible for the Democracy to subsist.[37]

The people feared not any ill consequence to liberty from the authority of the criminal courts, because these were nothing but very numerous juries, chosen by lot from among the people; and they considered themselves justly as in a state of perpetual pupilage, where they had an authority, after they came to the use of reason, not only to retract and control whatever had been determined, but to punish any guardian for measures which they had embraced by his persuasion. The same law had place in Thebes, and for the same reason.

It appears to have been a usual practice in Athens, on the establishment of any law esteemed very useful or popular, to prohibit for ever its abrogation and repeal. Thus the demagogue who diverted all the public revenues to the support of shows and spectacles, made it criminal so much as to move for a repeal of this law; thus Leptines moved for a law, not only to recall all the immunities formerly granted, but to deprive the people for the future of the power of granting any more; thus all bills of attainder were forbid, or laws that affected one Athenian without extending to the whole commonwealth. These absurd clauses, by which the legislature vainly attempted to bind itself for ever, proceeded from a universal sense of the levity and inconstancy of the people.

II. A wheel within a wheel, such as we observe in the German Empire, is considered by Lord Shaftesbury[38] as an absurdity in politics; but what must we say to two equal wheels which govern the same political machine without any mutual check, control, or subordination, and yet preserve the greatest harmony and concord? To establish two distinct legislatures, each of which possesses full and absolute authority within itself, and stands in no need of the other’s assistance, in order to give validity to its acts, this may appear beforehand altogether impracticable as long as men are actuated by the passions of ambition, emulation, and avarice, which have been hitherto their chief governing principles. And should I assert that the state I have in my eye was divided into two distinct factions, each of which predominated in a distinct legislature, and yet produced no clashing in these independent powers, the supposition may appear almost incredible; and if, to augment the paradox, I should affirm that this disjointed, irregular government was the most active, triumphant, and illustrious commonwealth that ever yet appeared on the stage of the world, I should certainly be told that such a political chimera was as absurd as any vision of the poets. But there is no need for searching long in order to prove the reality of the foregoing suppositions, for this was actually the case with the Roman republic.

The legislative power was there lodged in the _comitia centuriata_ and _comitia tributa_. In the former, it is well known, the people voted according to their census; so that when the first class was unanimous, though it contained not perhaps the hundredth part of the commonwealth, it determined the whole, and, with the authority of the senate, established a law. In the latter, every vote was alike; and as the authority of the senate was not there requisite, the lower people entirely prevailed and gave law to the whole state. In all party divisions, at first between the Patricians and Plebeians, afterwards between the nobles and the people, the interest of the aristocracy was predominant in the first legislature, that of the democracy in the second. The one could always destroy what the other had established; nay, the one by a sudden and unforeseen motion might take the start of the other and totally annihilate its rival by a vote, which, from the nature of the constitution, had the full authority of a law. But no such contest or struggle is observed in the history of Rome: no instance of a quarrel between these two legislatures, though many between the parties that governed in each. Whence arose this concord, which may seem so extraordinary?